Do I Need International Rental Car Insurance When I Travel Abroad?

Staying safe in your rental when you hit the open road

How would you manage with rental car insurance in another country? These tips can help you save money - and sanity - when you travel abroad.
Patrik Stollarz/Getty Images News

One common confusion for modern travelers is what kind of travel insurance they need when going abroad. This is especially true for those who rent a car in another country. While the limitations of insurance for rental cars has been well documented, that same level of coverage may (or may not) apply when you travel abroad.

Between the language barriers and different traffic laws, car renters can be left with more questions than answers. Do you know what you would be liable for when you rent a car in another country?

By understanding the different coverage levels and how they may affect your situations, you can better prepare yourself for the worst case situation. Here are some commonly asked questions about travel insurance for rental cars while abroad.

Does auto insurance extend to international rental cars?

Your current auto insurance policy may cover your rental car in the event that you were to get into an accident while traveling in the United States, but would it extend across borders? Most auto insurance only apply their benefits to domestic rentals - international rental cars are not included in these policies. Because of the inherent hazards that come with driving in another country, along with international laws, most policies end when you cross into another country.

Before making international rental car plans, be sure to understand if an auto insurance policy extends to another country. If an insurance plan does not extend across oceans and borders, it may be time to consider purchasing a travel insurance rental car policy. The most common plans either come with a travel insurance policy, or directly from the rental car company.

Rental car insurance as part of your travel policy

When traveling abroad, a travel insurance policy can aide travelers in the worst case scenarios - including traffic accidents. Some travel insurance policies offer an additional rental car insurance buy-up that will cover international rental cars, alongside your trip cancellation and medical benefits.

When considering purchasing rental car insurance, be sure to read the fine print on what situations are covered. For instance: many rental car buy-ups will cover collision insurance, but not theft from the vehicle. Additionally, some insurance products may be secondary, meaning that they would only apply after a first line of insurance is applied.

Finally, some rental car insurance providers may not accept a secondary form of insurance as valid. Instead, they may leave the traveler with two choices: provide a letter from a credit card provider guaranteeing insurance, or provide insurance from the rental car company. 

Rental car insurance through your renting company

When full coverage is required, travelers can purchase an insurance policy direct from their rental car companies. While these policies charge a daily rate upwards of $25 per day, they may be able to help shoulder the costs in the event of an emergency situation.

As always, make sure to understand the fine print of an insurance policy before purchase. A policy with many caveats and exclusions, or one that is considered "supplementary" or "secondary" only, may not provide a complete level of coverage if something goes wrong. In many cases, travelers can find out what insurance requirements rental car companies require with a quick search of their websites.

Nobody wants to think about the worst case scenario when they travel - especially in a rental car. But by understanding what rental car insurance covers before hitting the road, travelers can head down the open highway free and easy.